Business
Africa Attracts Increased FDI Despite Growing Insecurity
Aside the strengthened regional integration, Africa has started diversifying economic activities, with oil-rich countries like Nigeria looking at other opportunities like Agriculture, thereby growing employment levels and creating a new consumer class. The Ernst & Young said the development had paved the way for increasing FDI in consumer-focused services and manufacturing sectors. The report also revealed that African investors nearly tripled their share of FDI projects over the last decade.
Perception differs still
According to the report, “those already active on the continent rank it as by far the most attractive investment destination in the world today, while those who are yet to invest are far less enthusiastic, ranking Africa as the least attractive investment destination in the world.”
Ernst & Young noted further that “even though investment perceptions have improved so dramatically, actual investment in Africa has not accelerated as much, since many potential foreign investors continue to view the entire continent as a high-risk destination.” Despite this perception by some, about $68 billion investment was said to have been secured by the continent following the recently concluded World Economic Forum on Africa (WEFA), showing that several foreign investors still see the potentials in the continent.
The report submits however that “Africa is an inherently challenging place to do business, but many companies pursuing a long-term African strategy have generated excellent returns from their investments.”
Africa’s future
The future seems bright for foreign investors on the continent as Africa continues to showcase its resolve to grow despite a broadened list of challenges. According to the African Development Bank (AfDB), Africa’s GDP is about $1.5 trillion. Analysts however say the figure would increase when countries rebase their GDP (Nigeria became Africa’s largest economy when it rebased its GDP).
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